Master thesis

4.0Theory

In this section the two conceptual frameworks used in this thesis, by Garrett Hardin and Elinor Ostrom, will be described. Garrett Hardin´s “Tragedy of the Commons” is based upon classical liberal economic theory and its assumptions about human and market behaviour, concerning the rational individual and profit maximization, which will lead to overexploitation. Elinor Ostrom´s “Governing the Commons” focuses on community management and build upon the assumptions that CPRs are often not the open-access resources Hardin describe them as, and the actors’ behaviour is not associated with the term of a profit maximizing rational individual from the liberal economic theory. Both frameworks focus on usage, access and governance of Common Property Resources, but as stated, have different approaches and assumptions on this subject.

The reason for choosing these two theories are: The influence of Hardin´s Tragedy on development policy, his conclusion of either private property or Government control as the only way out of the dilemma and his refusal of the user’s ability to create sustainable local management. Ostrom´s more recent theory has been chosen due to her focus on the ability of the community to manage their commons, her refusal of the liberal rational behaviour as the sole motivator and the communities ability to remove themselves from the dilemma of overexploitation and destruction of their livelihood.

4.1Garrett Hardin - Tragedy of the Commons:

The Tragedy of the Commons, which have become an integral part of “conventional wisdom” regarding environmental studies, resource science and policy, economics and political science^37,38, refers to the social dilemma put forth by the ecologist, Garrett Hardin, in 1968.

Hardin´s theory provides a concept of understanding on how we have come to the brink of numerous environmental disasters. His thesis is that people face dangerous situations, not because of a malicious outside force, but because of the behaviour of many individuals acting alone³⁹.

Hardin´s article The Tragedy of the Commons both challenged and inspired its contemporary generation. The article is one of the most cited publications of recent times, as well as one of the most influential for ecologists and environmental policy researchers (E. Ostrom)⁴⁰. Hardin´s Tragedy of the Commons has its roots in classical liberalism and many of the assumptions are based on classical liberal economic theory, such as Adam Smith´s invisible hand and the rational individual profit maximizer⁴¹.

It was published at a time when environmental concerns were emerging from local- to global issues and a period where other major works, such as The Population Bomb (Ehrlich, 1968) and The Limit to Growth (Meadows, 1972) had serious attention from policy-makers and academics⁴². These works had similar conclusions: The global environment was threatened by fundamental human characteristic⁴³. For Ehrlich it was the desire to reproduce, for Meadows; the tendency to endlessly expand our production and consumption of goods and for Hardin; our short-sightedness and our tendency to look out for our-selves first⁴⁴. In general, the conclusion was: Humanity was forced to change or find a way to restrain human nature⁴⁵.

Hardin uses the word Tragedy as the philosopher Whitehead⁴⁶ used it: "The essence of dramatic tragedy is not unhappiness. It resides in the solemnity of the remorseless working of things”⁴⁷. Although Hardin is properly one of the most influential researchers on this subject, many were sceptical towards the commons long before him. “What is common to the greatest number has the least care bestowed upon it. Everyone thinks chiefly of his own, hardly at all of the common interest”. Aristotle, Politics, Book II⁴⁸.

Since the early studies of Common Property Resources by Gordon (1954) and Scott (1955) economists have analyzed common property resource systems using relatively similar assumptions and Garrett Hardin is a clear example of this⁴⁹. In these systems it is assumed that:

• 
  The resource generates a predictable, finite supply of one type of resource unit in each relevant time period.
  
• 
  Users are assumed to be homogenous in terms of their assets, skills, discount rates, and cultural views.
  
• 
  The users are short-term, profit-maximizing actors who possess complete information.
  

In this perspective, anyone can enter the resource and utilize resource units. The user gain property rights only to what they extract, which they then sell in an open competitive market⁵⁰. The open access condition is a given and the users do not make any effort to change it, in terms of restricting the access. The users act independently and do not communicate or coordinate their activities in any way⁵¹.

The Tragedy.

Hardin exemplifies the “tragedy of the commons” in a scenario of a pasture land, with open access to all. Furthermore, it is expected that each herder will try to keep the maximum number of livestock on the pasture⁵², as rational profit maximizers. Hardin´s herder asks himself: What is the utility for me of adding one more animal to my herd? According to theory, this has one positive component and one negative⁵³.

• 
  The Positive:
  

The positive component is a function of the addition of one animal. Since the herder receives all the benefits from the sale of the additional animal, the positive utility is close to +1.

• 
  The Negative:
  

The negative component is a function of the additional overgrazing created by one more animal. Since the effects of overgrazing are shared by all the herdsmen, the negative utility for any particular herdsman, connected to the commons, is only a fraction of -1.

In adding the components partial utility together, the rational herdsman concludes that, the only sensible course for him is to add another animal to his herd and continue to do so⁵⁴.

Therefore, in Hardin's example it is in each herder's interest to put the next (and succeeding) animal he acquires onto the land, even if the quality of the common is damaged for all as a result. This is caused by herder receiving all of the benefits from an additional cow, while the damage to the Commons is shared by the entire group. But it will be the rational conclusion of each and every herdsman sharing the Commons, to add more animals in order to reap the benefits and share the cost⁵⁵. When all the herdsmen make this individually rational economic decision, the common will be depleted or even destroyed, to the detriment of all and therein the tragedy of the commons⁵⁶.

“The individual benefits as an individual from his ability to deny the truth even though society as a whole, of which he is a part, suffers”⁵⁷.

Hardin produces examples of this by pointing to cattle rages in the US where the increase in livestock has come to a point where overgrazing leads to erosion and dominance of low nutrition vegetation and towards the more commonly known overexploitation of the whale population⁵⁸.

According to Hardin an appeal to conscience to desist from overexploiting the commons, would be understood in two ways, an intended verbal communication and an unintended nonverbal⁵⁹:

1. 
   If you don't do as we ask, we will openly condemn you for not acting like a responsible citizen.
   
2. 
   If you do behave as we ask, we will secretly condemn you for a simpleton who can be shamed into standing aside while the rest of us exploit the commons.
   

Hardin states that responsibility should only be used in specific social arrangements, that create coercion. In this sense Hardin argue that we should seek to create social arrangements that will prevent the pasture land in becoming Commons, and thereby prevent the freedom of overexploitation⁶⁰, this would be either through private property arrangements or government control. In other words, coercion through an outside agent⁶¹.

“Individuals locked into the logic of the commons are free only to bring on universal ruin; once they see the necessity of mutual coercion, they become free to pursue other goals”⁶².

Implicitly, the theory assumes that regulators will act in the interest of the public and understand how ecological systems work and how to change institutions so as to induce socially optimal behaviour⁶³.

Open Access:

An open access resource is defined as a depletable, fugitive resource characterized by rivalry in exploitation; it is subject to use by any person who has the capability and will to enter into harvest or extraction of it; and its extraction results in negative externalities⁶⁴.

The rivalry in production of an open access resource indicates that one agent’s extraction of the resource excludes another agent possession. If one fisherman catches a fish, another can’t possess the same fish. The rivalry in extraction indicates that the open access resource is not a pure public good⁶⁵ in all potential uses. The depletability of an open access resource reflects not only the rivalry in extraction but also that a rate of use, that reduces the resource to zero, exists. The fugitive nature of an open access resource means that it is “reduced to ownership by capture”. There are no enforceable ownership rights over the resource in question⁶⁶.

A maximum sustainable yield (MSY) should be reached, according to Stevenson, when the effort going into the extraction of the resource will decline the reproduction, and therefore efforts beyond the MSY will reduce the output and cause decline in revenue⁶⁷. The yield-effort function is an equilibrium concept, where, in a fishery, as efforts increase catch and revenue increase up to a point where it meets the MSY. Further increase in effort would result in decline in catch levels, due to a lower fish population and a slower reproduction, as well as a decline in revenue⁶⁸. At the point of MSY the actors will be making a profit and this will attract new inputs, either from the actors themselves or from new actors. But due to the open access of the resource, the existing actors cannot prevent new actors from entering and thereby increasing the effort beyond the MSY or into overexploitation⁶⁹.

“...no level of “optimal rate output” can be maintained indefinitely, because of the open access conditions: at such an effort level the fishermen would earn a profit, additional fishermen would be attracted, and efforts would increase”⁷⁰.

Population Growth:

According to Hardin, a finite world can only support a finite population, and therefore growth must sooner or later equal zero⁷¹. Hardin argues, that the population growth, as well as his views on human nature, is one of the main reason for the Tragedy and both should be seen through Adam Smith’s optics of “the invisible hand”; each individual acts in its own interest and through that is guided to promote the public interest⁷². The unlimited access to the Commons is what, according to Hardin, causes the Tragedy⁷³.

“To couple the concept of freedom to breed with the belief that everyone born has an equal right to the commons is to lock the world into a tragic course of action.”⁷⁴

Hardin criticises the UN declaration of human rights from 1967, stating that: ...the family is the fundamental unit of society and it therefore follows that any decision regarding the size of the family only rests with the family itself. Hardin denies, categorically, as he writes it, the validity of this human right. Hardin states that, the most important necessity that should be recognized must be the necessity in removing reproduction from the Commons⁷⁵. In other words, to govern the reproduction of mankind.

“The only way we can preserve and nurture other and more precious freedoms is by relinquishing the freedom to breed, and that very soon. "Freedom is the recognition of necessity"-and it is the role of education to reveal to all the necessity of abandoning the freedom to breed. Only so, can we put an end to this aspect of the tragedy of the commons”⁷⁶.

Hardin argues that, it would be a mistake to think that human reproduction could be controlled simply by an appeal to conscience, due to the Darwinian belief that procreation is heredity; therefore it should be done through law⁷⁷. He does not mention how this should be done within the boundaries of democracy.

Avoiding the Tragedy:

By Hardin, the most straightforward way to achieve restraint towards resource extraction is through coercion, administered by outside agents⁷⁸. Hardin sees two possible solutions to create coercion, either through centralized control or through private property. While privatization is the less severe, it involves external actors and the force of law to defend the private property and to manage as they see fit⁷⁹. Creating property rights in the Commons would create a structure of rules that recognizes dissipation and would work towards reducing or avoiding it⁸⁰.

The creation of private property rights in the Commons would secure an exclusive right to resource extraction that in turn would impart the incentive to the user to utilize the resource at an optimal rate⁸¹. The private rights holder would not only reap the benefits but also incur all the cost of additional resource extraction. A balancing of these benefits and costs would lead the user to an optimal extraction rate, according to theory of common property economics⁸².

According to Hardin, taxing would be an effective coercion tool and to avoid enforcement of a ban of the social behaviour, simply by making the norm increasingly expensive to do. Hardin also states that the only form of coercion he would recommend would be a mutual coercion, mutually agreed upon by the majority of the people affected⁸³.

Hardin identifies two human factors that he believes, drive environmental change: Firstly; the increasing demands for natural resources and environmental services, due to the growth in population and per capita resources consumption. Secondly; the way humans organize themselves into institutional arrangements to extract resources from the environment and eject waste into it⁸⁴. Hardin argues that, only two state-organized institutional arrangements could sustain commons in the long run, private property and State Government⁸⁵.

Hardin´s view can be stated as follows: If a group of people are placed in a situation where they could mutually benefit if all adapted to a set rule of restrained use, they will not do so in the absence of an external enforcer of agreements, due to their self-interests.

Critique of Hardin´s Tragedy of the Commons

As stated, Hardin uses a form of game theory to analyse the commons and his example of the open pasture land. Although, he does not use the well known Prisoners' Dilemma, his argument shares the same assumptions and can be represented as a variant of this model⁸⁶. Just as the Prisoners' Dilemma, Hardin's example assumes that the individual herder has no information about the aggregate state of the commons and its proximity to collapse, as well as there is no communication between the herders⁸⁷. This assumption permits Hardin to have the herder make a decision just prior to collapse, that is against his own self-interest, to add another animal and thereby initiate the collapse, with the consequence that he, as well as the others, lose it all⁸⁸.

The issue of critique is the amount of information people have about the larger situation in which they function. According to Wade, the informational assumption does not make sense in the usual village situation⁸⁹. Here, monitoring the condition of the commons, and of cheating, is frequently and fairly easy.

Hardin does not make the distinction between situations of no property and situations of common property. He begins his argument by assuming 'a pasture open to all'. The case is quite different where a joint ownership unit exists, and access is open only within the bounds of this unit, such as the Joint Forest Management system. Here the chances of getting compliance with rules of restrained access are much better⁹⁰. By ignoring the distinction, Hardin generalise the results for no property to cover common property as well. According to Wade, cases of successful common resource management have all involve common property rather than no property⁹¹.